The Turnbull government has acknowledged for the first time that Australia is failing to secure a fair share of revenue from oil and gas companies, with Treasurer Scott Morrison calling a review into the tax scheme governing offshore projects.

In a stunning admission more than 12 months after Fairfax Media revealed concerns that the petroleum resource rent tax was being gamed by the biggest fossil fuel multinationals, Mr Morrison conceded on Wednesday: "We think it is a problem."

Mr Morrison acknowledged concern that the PRRT was not operating as it was "originally intended" and said the inquiry would "address the reasons for the rapid decline of Australian PRRT revenues".

The International Transport Workers' Federation, which has commissioned analysis of the PRRT, said the mountain of tax credits would swallow any public benefit from $40 billion in LNG exports by 2019.

"That's simply unacceptable and the system needs to change," said ITF President Paddy Crumlin

"ITF research demonstrates, internationally, Australia is a soft target for the oil and gas industry. We welcome the Treasurer's announcement as an important first step and look forward to making a submission to the inquiry."